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manufacturing

Boeing-Textron V-22 said to be cut $1.75B by Pentagon

Posted:
Friday, February 3, 2012 10:05 am

By Tony CapaccioBloomberg News

WASHINGTON - The Pentagon will eliminate 24 V-22 Osprey aircraft built by Boeing Co. and Textron Inc. from its five-year budget plan, saving $1.75 billion through 2017, according to two U.S. officials.

The planned reduction to 98 planes from 122 will be reflected in a final, multi-year contract that’s under negotiation between the Navy and companies, according to one of the officials, who spoke on condition of anonymity because the decision hasn’t been announced.

The V-22 is a fixed-wing plane with rotors that tilt so it can take off and land like a helicopter. Boeing, the world’s largest aerospace company, and Textron’s Bell Helicopter unit are in the last year of a four-year, $10.9 billion contract for 174 aircraft. The Bell Helicopter-Boeing team submitted a proposal in August for all 122 aircraft that were previously planned.

The Pentagon’s decision to curtail V-22 purchases is part of an effort to find $259 billion in planned savings through 2017. The cutbacks also include delays in acquiring 179 F-35 fighters, two Littoral Combat ships, one Virginia-class submarine and postponing by two years construction of the next generation of ballistic-missile submarines.

The Army is canceling upgrades of its Humvee all-terrain vehicles, and the Navy isn’t buying eight Joint High Speed Vessels.

Procurement Request

The cumulative effect in fiscal 2013 of program terminations and cutbacks will result in a procurement request of $98.8 billion and $69.4 billion for research and development, according to an official familiar with the Pentagon’s spending plans who spoke on condition of anonymity before President Barack Obama sends his budget to Congress on Feb. 13.

That’s $18.8 billion less than announced in February 2012 for procurement in fiscal 2013 and $6.3 billion less for research, according to Pentagon budget data.

The Pentagon now intends to buy 21 V-22 aircraft in each of the next two budget years, down from 27 planned previously for fiscal 2013 and 26 for fiscal 2014.

The military would buy 19 aircraft a year in 2015 and 2016 instead of the planned 23 each year, and 18 in 2017. No number had been set previously for that year.

The reduced aircraft include seven of the Air Force’s CV-22 models for special operations forces.

March 1

The Navy and contractors for the next round of V-22s must develop reliable data allowing the service to certify to Pentagon officials that buying them in a five-year block can save at least 10 percent over annual batch purchases. The certification is due to Congress on March 1, and the Navy plans to sign the contract later this year, Navy spokeswoman Stephanie Vendrasco said in an e-mail.

“We cannot speculate or comment on V-22 quantities in the budget for 2013 until it is released,” she said.

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